Amendments to the securities law

Amendments to the securities law By Linh Trang The foreign ownership ceiling for public companies is raised to 100%, up from the current threshold of 49% (currently, firms hoping to expand the threshold to 100% must seek approval from shareholders) – PHOTO: THANH HOA HCMC – The State Securities Commission has just unveiled the draft amended Securities Law to gather feedback. The amendments aim to address shortcomings after 10 years of enforcing this law. Given the significant degree of global integration, it is important to bear in mind international norms and experience. The Saigon Times hopes to offer some information and perspectives in this regard. Recently, the State Securities Commission has released the draft amended Securities Law, with some new provisions aimed at helping Vietnam’s stock market undergo a drastic qualitative transformation and better meet conditions for a better rating as an emerging market. Significant changes: raising the minimum capital threshold for public companies Under the new regulations, firms selling shares to the public must have a charter capital of at least VND30 billion, VND20 billion higher than the current threshold, and reap profits for two consecutive years before that in which shares are offered (one year longer than the currently prescribed duration). This compels companies to enhance their financial capabilities and efficiency if they want to become public firms. It is also consistent with international norms as public companies in other countries tend to be big and boast a large number of shareholders. In the U.S., companies with a… [Read full story]